Revealed: solicitors set for poll in last-ditch bid to derail SRA as ABS regulator

By Legal Futures

10 March 2011

Postal ballot: £80,000 cost is justified, say campaigners

Sole practitioners are set to requisition a special general meeting of the Law Society and a postal vote of all solicitors in a bid to overturn Chancery Lane’s support for alternative business structures (ABSs) and wreck the Solicitors Regulation Authority’s application to become an ABS regulator, Legal Futures can reveal.

The signatures of just 100 solicitors are needed to requisition the SGM, at which the postal vote will be sought. Lawumi Biriyok, who chairs the Solicitor Sole Practitioners Group (SPG), said she was confident they would secure the necessary backing. Letters are going out of local law societies to garner further support.

A postal ballot will cost the society £70-80,000, but the SPG insists the issue is sufficiently important to warrant the expenditure. It has waited until now to take this step because it believes that solicitors are now starting to wake up to the impact of ABSs.

The SPG has been one of the staunchest critics of ABSs since they were first mooted. Ms Biriyok said they would dilute the legal profession, while consumers would suffer by being put second to profit.

The three motions set to go before the SGM state opposition to ABSs and call on the Law Society to lobby minsters, MPs, judges and others over them; express disapproval of current and former council members for not opposing “majority commercial ownership” of legal practices; and say the council should not authorise the SRA to apply to regulate ABSs.

The council will this month vote on whether to approve the SRA’s application to become an ABS regulator. Constitutionally, even if the motions are passed, the council is not required to adhere to them.

If the council votes to approve the SRA’s application this month, the Law Society could still submit it to the Legal Services Board even though the SGM would not have happened by that time. Equally, the council could choose to delay its vote pending the outcome of the SGM.

We understand that the approval process is such that if the SRA application is not submitted this month, it cannot be processed in time for the SRA to start accepting ABS applications on 6 October.

A draft statement to accompany the resolutions states the proponents’ belief that “there is a large body of the membership of the Law Society who are not content with the way in which the council has represented the membership over the years in not opposing commercial ownership of legal services”.

It continues: “It will be said that nothing much can be done to prevent the introduction of the commercial ownership of the profession at this late stage of the day, but at least Law Society members will have been given an opportunity to express their views. In the event that [ABSs are] brought into force, there are still many issues to be resolved as to the regulation of the commercial entities who will inevitably take over much of the provision of legal services, and the fact of the clearly expressed views of the membership may well have some influence on these issues.”

The statement says the SRA regulating ABSs would not level the playing field between law firms and ABSs, as is claimed. “The playing field can never be level setting solicitors’ firms against commercial organisations with their substantially larger financial capability and their commercial ethos of profit for their shareholders,” it says. As a result, it argues that the SRA will be dominated by ABSs at a cost that will be largely borne by solicitors.

Meanwhile, the SRA’s standards committee has this week approved an amended draft Solicitors Handbook, which includes the new SRA principles, Code of Conduct and supporting rules, following the recent consultation.

In a statement, it said: “The committee was confident that the Handbook provided a robust set of regulatory arrangements to enable the implementation of outcomes-focused regulation in October 2011 and to support the application to the Legal Services Board for the SRA to become a licensing authority for ABSs. The committee was confident that the Handbook would provide a robust framework for the safe licensing and regulation of ABSs in the public interest.”

The Handbook and the application should be signed off by the SRA board next Tuesday for submission to the council, which meets on 23 March.

One Response to “Revealed: solicitors set for poll in last-ditch bid to derail SRA as ABS regulator”

I would strongly urge all those who have not done so to wake up and support the SPG motion to prevent ABS firms into the legal arena. This was a product of the Clementi Report which was brought in by the previous Government in an effort to introduce competition and has been taken up by the present administration without fully considering the implications on both the public and law firms. It is not too late to stop this going ahead with its potentially disastrous implications.

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